Proudhon may be right, but did Bill Gates steal his billions? (3)

Sun, 24 Apr 2016 Source: Baidoo, Philip Kobina

I cannot conclude this series without discussing the pay package of the chief executive of Oxfam? The average salary in United Kingdom is £26,500, but Mark Goldring from the contributions of very modest salaries takes home £121,294. This figure is what was reported in their financial year 2013/14. Obviously, it would have been revised up due to inflation or the customary yearly increment. Clearly, this did not go down well with a lot of people and he was queried about it. The answer he gave is very revealing. Though it will satisfy a lot of people, on the other hand, for the tea cup storm that he has stirred it does not stand for any serious examination. I do not want to clatter this piece so I will give way to his own words. He said, ‘I wouldn't allow a situation where I thought I was being paid an unreasonable amount, but we also have to work to educate, inform and be transparent with the public, telling them that you are not going to get a finance director capable of managing a £400m operation and pay them £25,000. It won't happen, and it would be irresponsible.’

Yes, of course, it wouldn’t happen and it would be irresponsible and I wouldn’t have any problem with that if he had kept quiet to enjoy his booty. The flaw in his argument is that he is measuring his salary based on the budget he manages. Now, can we make the same argument for the chancellor of the exchequer who controls the U.K. budget of £1.1 trillion? In that case George Osborne should also be taking home in the excess of £50 million a year.

It’s absolutely unbelievable; these people are so jealous of what others have got they lose their brains and temperament that will even help them keep the little they have – the parable of the talent. Their destroyed reaction to this intractable problem, whip up the emotions of the have-nots to fine indignation. This leads to nothing, but violent demonstration that end up smashing the little they have to fall on. The irony about this is that most of the businesses in poor neighbourhoods are owned by very modest people. These hoodlums led demonstrations, destroy the livelihood of hand to mouth businessmen and create blighted neighbourhoods in the aftermath. Unfortunately, deepening the plight of the poor their hearts bleed for.

The person who created Whatsapp, Jan Koum, is a multi-billionaire. I know people resent what they think as unwarranted lucre, but what they fail to see is that this man saved me more than £120 every year for calling my parents and love ones back home for free. This is a huge sum of money, especially if you are poor. In effect, this man has made my life richer regardless of what he has made for himself.

Economics is all about the allocation of scarce resources, which have alternative uses. Labour is an economic resource, and it has alternative uses. If a state puts all her brainy people in pursuit of a nuclear bomb, like North Korea does, there will be none to look for cancer drug or experiment for the new form of energy the world is craving. The expansion of Ford in car manufacturing would have undoubtedly displace some workers in other motor plants. However, it doesn’t stop there. Those displaced could have gotten a job in the expanding tyre manufacturing industry, gasoline sales, some would have branched as foremen in civil engineering in road construction as more roads were needed to cater for the volume of cars coming out of the Ford plant. Henry Ford, in effect, reallocated the labour resources of the American economy more efficiently – increasing productivity in ever wider circles.

We don’t have to brood over whether a billionaire has his own private jet, but whether the poor man can also afford a jet flight to a budget holiday destination even if it is with Easyjet. Our preoccupation should not be about the rich man driving his Bentley or Ferrari, but whether the average Joe can also afford a Nissan Micra. On British motorways, the speed limit is 70mph. Hypothetically, the Nissan Micra and a Bentley will reach their destination at the same time. Our indignation should not be on whether a billionaire is cruising on the seven seas on his private yacht, but rather the possibility of the poor man also going on a budget cruise liner.

The chief executive of Oxfam argues as if the world’s wealthiest people stole their wealth from the rest of mankind. I would rather suggest that an organisation like Oxfam uses the poor as a gold mine for themselves. They take the widow’s might of the poor and pay themselves huge salaries. Most of the people who create enormous wealth do so by providing an unusual service, product at amazing cheap prices to the consumer. These 62 people provide products and services, which the world have an insatiable appetite. What is the raison d'être of Oxfam? Without the poor they are nothing. I would suggest that they should keep the status quo to help them keep their lucrative jobs.

To produce something capital is required, and the bigger the capital the greater the productivity. What will be the productivity of a worker in a warehouse who uses his physical strength to carry sacks of cocoa and another who uses forklift? The forklift driver will have huge productivity, but his output was due to the expensive capital he used – the forklift. In the eyes of the progressives this forklift driver will be making huge revenue for his employer, but what they fail to see is that the employer took a huge loan to purchase the expensive capital, which needs to be paid back. He is a benefactor to the employee because he will not be experiencing bad back and he will be more productive far into the future.

If there is a town of a million inhabitants with one millionaire. Will it make any good if the millionaire out of compassion for his compatriots distributes his million or alternatively keep it and build a hospital or school? The one dollar each will not make a dent in their fortune. However, a school or hospital will go a long way to improve their wellbeing and future.

Just think about it, the average house in London is £530,368. If someone comes along and is able to slash it by half and speaking theoretically, in the process, makes unimaginable lucre people will be literally worshipping him, but all that the progressives will see is the fortune he makes out of it.

If you don’t want to see another billionaire when the next must have technology comes on stream don’t patronise it. When someone is able to produce a 60-inch television that normally cost £1,000 and he is able to bring it to the market for £300 don’t buy it. You will be insane not to. Nevertheless, the transfer of our little dollars to these innovators is what makes them fabulously rich.

Finally, I think Mark Goldring should advice the various heads of government of the poor countries around the globe to apply sound economic policies. If they do, I don’t think we will be having this discussion, save corruption.

Philip Kobina Baidoo Jnr



Columnist: Baidoo, Philip Kobina